Episode Summary: Possible Early Retirement Readiness

Podcast Title: Jill on Money with Jill Schlesinger
Host/Author: Audacy
Episode: Possible Early Retirement Readiness
Release Date: June 30, 2025

Introduction

In the episode titled "Possible Early Retirement Readiness," host Mark engages with Veronica, a 54-year-old federal worker from Alaska, to discuss her considerations and preparations for early retirement. The conversation delves into Veronica's financial standing, retirement plans, and the steps she can take to ensure a secure and comfortable retirement.

Veronica's Current Financial Situation

Veronica provides a comprehensive overview of her financial health, highlighting her savings, investments, and property.

• Thrift Savings Plan (TSP):
  "I have $890,000 in the Thrift Savings Plan," ([04:51] Veronica).

• Additional Savings:
  She maintains a Roth IRA with $90,000, taxable accounts totaling $135,000, and an inherited IRA worth $281,000, which predates the SECURE Act.
  "I have a Roth IRA at 90,000. I have taxable accounts for 135,000 and an inherited IRA at 281,000," ([05:09] Veronica).

• Liquid Assets:
  Veronica holds approximately $100,000 in high-yield savings and Certificates of Deposit (CDs).
  "I have about $100,000 in high yield savings and CDs," ([05:59] Veronica).

• Real Estate:
  She owns a townhouse valued at around $285,000 with a remaining mortgage of just over $18,000 at a favorable interest rate from refinancing in 2013.
  "I have a townhouse that's worth approximately 285,000 with a mortgage remaining of just over 18,000," ([06:13] Veronica).

Retirement Plans and Pension

Veronica is contemplating retirement at 57, aiming for 2028.

• Pension Details:
  Upon retiring at 57, Veronica expects an annual pension of approximately $32,000, which includes cost-of-living adjustments starting at age 62.
  "If I retire at 57, which is my current plan in 2028, it would be, based on today's numbers, approximately 32,000 with a cost of living increase starting at the age of 62," ([07:00] Veronica).

• Supplemental Income:
  From ages 57 to 62, she anticipates receiving an additional $18,000 annually from supplemental sources, totaling around $50,000 before taxes.
  "I would like to stay at about my current spending level. So I'd like 70 to $75,000 net in retirement... we get the supplemental money from 57 to 62, which I estimate to be about $18,000," ([07:14] Veronica).

• Social Security:
  At full retirement age, Veronica expects to receive approximately $37,000 per year from Social Security.
  "At full retirement age, about $37,000 a year," ([08:46] Veronica).

Income Requirements and Supplementation

Veronica aims to maintain her current spending level of $70,000 to $75,000 annually during retirement. With her pension and supplemental income, she needs to secure an additional $25,000 per year to meet her financial goals.

• Current Income:
  Veronica earns about $135,000 annually from her job, contributing $31,000 to her Thrift Savings Plan and maintaining a balanced investment portfolio.
  "How much do you earn right now? About 135 from my job," ([09:33] Veronica).

Concerns and Financial Strategies

While Veronica is confident in her financial numbers, she expresses concerns about the management of her inherited IRA and seeks advice on optimizing her retirement strategy.

• Inherited IRA Management:
  Veronica inherited an IRA over ten years ago and is dissatisfied with her current advisor. She is keen on reassessing her investment strategy to better align with her retirement goals.
  "I inherited an IRA with a terrible big advisor broker firm, in my opinion. And I'm concerned because I've heard you say that the best time to make changes is when you inherit it," ([10:52] Veronica).

• Spending and Savings Adjustment:
  She considers adjusting her spending slightly and reallocating funds to enhance her quality of life without compromising her savings.
  "I could probably spend a little more now, since I'm living on about 5,000 to 5,500 a month," ([10:00] Veronica).

Advice and Recommendations

Mark provides Veronica with actionable advice to address her concerns and optimize her retirement readiness.

• Financial Planning Support:
  Mark suggests seeking a fee-only financial planner through the National Association of Personal Financial Advisors (NAPFA) to receive unbiased advice and streamline her investment strategy.
  "I would go to napfa.org that is where you find fee only planners... someone in Alaska who will map out a plan for you," ([12:30] Mark).

• Utilizing Inherited IRA:
  He recommends leveraging her inherited IRA to supplement her retirement income, thereby managing her tax bracket efficiently.
  "You could access that money whenever you want as opposed to, you know, when you're 54," ([11:45] hypothetical timestamp based on context).

• Tax Planning:
  Emphasizing the importance of tax-efficient strategies, Mark advises integrating tax planning into her retirement strategy to maximize her net income.
  "And some tax planning. Yes," ([12:28] Veronica).

Conclusion

The episode concludes with Mark encouraging listeners who are considering early retirement to seek professional financial advice early on. He reiterates the importance of proactive planning to ensure a comfortable and secure retirement.

• "If you're not lucky enough to have a pension, but you're young and you're thinking about your future, get in touch with us... change your work, change your wealth, change your life," ([14:00] Mark).

Key Takeaways

• Early Retirement Planning:
  Veronica's case illustrates the importance of having a diversified retirement portfolio, including pensions, savings, and investments.

• Professional Financial Advice:
  Engaging with a fee-only financial planner can provide personalized strategies to optimize retirement readiness and manage inherited assets effectively.

• Tax Efficiency:
  Implementing tax-efficient withdrawal strategies is crucial for maintaining a desirable tax bracket and maximizing retirement income.

• Proactive Financial Management:
  Regularly reviewing and adjusting financial plans ensures alignment with evolving retirement goals and market conditions.

By addressing Veronica's specific financial situation and providing tailored advice, the episode offers valuable insights for listeners contemplating early retirement, emphasizing the significance of comprehensive financial planning and professional guidance.